Components of an Effective Performance Management System

Student’s Last Name 1
Human Resource Management
By (Name)
Course
Professor
University
Date

Student’s Last Name 2
Introduction
Performance management system refers to the systematic method that is used to assess
the performance of employees. The performance management system identifies skills,
competency, and knowledge gaps that exist which helps the organizations to devise ways to
make improvements by providing trainings, coaching, and guidance to employees. This reduces
conflicts within groups and employees in general. This is because employees are clear about the
expectations from their roles hence putting in efforts to meet performance standards. Moreover,
implementing the performance management system is important to an organization. It motivates
employees to take new challenges and innovate through structure process. It is an approach
through which companies align their objectives, goals, and mission with available resources such
as material and manpower. The performance management system has components that are useful
in providing guidelines to an organization.
The first element of the PMS is goal setting. Setting goals in an organization is important
since it gives the company direction. However, organizations should not only set goals but
specific and challenging goals. The goals should be specific, measurable, achievable, relevant,
and time-based (Yadav and Dabhade, 2013, pp.47). Therefore, goal setting is an important
component of performance management software. Goal setting assists an organization to achieve
more. On the other hand, an organization should encourage team goals compared to individual
goals since team goals motivate team members to work hard. The performance management
system of an organization should enable the setting of goals in an easy, simplistic, and
straightforward manner that inspires the teams to set goals and achieve a crucial milestone at
work.

Student’s Last Name 3
Rewarding good performance is another important component of the performance
system. Performance appraisal should be followed by reward and recognition. An organization
should reward and recognize the employees. The management of any organization should take it
as a portion of performance review and management process in order to stimulate the team and
employees that have achieved their performance targets. The employees may be motivated
through paid holidays, medical insurance, job promotions, and career development. This will
motivate the employees to work hard knowing that their efforts will be recognized (Baird,
Schoch and Chen, 2012, pp.171). In addition, offering rewards and recognition for performance
well done is a method of shaping behavior so that employees can work hard to qualify for an
appraisal through their continuous contribution to the company’s goals. According to the
incentives theory of motivation, people are inspired towards behaviors that lead to rewards and
they are demotivated from behaviors result to negative consequences (Bednall, Sanders and
Runhaar, 2014, pp.47). The theory relates to operant conditioning where behaviors are performed
in order to gain reinforcement or avoid punishment. According to this theory, the actions of
individuals are aimed at gaining rewards. Therefore, this relates to this component of
performance reinforcement in a way that when employees are motivated, they work because they
are certain that their handwork will be appreciated.
Another component is the manager reviews and feedback. A manager review refers to a
process where employees can evaluate the strengths and possible training needs of their leaders.
This approach gives leaders a chance to get useful feedback from their workers about core skills
needed to lead a group appropriately (Behery, Jabeen and Parakandi, 2014, pp.29). Example,
employees may find out that the leadership of the manager is affecting the group instead of
helping the team grow. Through the employee’s complaints and suggestions, the managers may